Public sector lender Punjab National Bank has announced a cut in car loans by 50 basis points with effect from March 1, 2009.

With the latest revision, the car loan would come down to 10.5-11 per cent from the existing 11-11.5 per cent.

It should be noted that earlier this month, the country's largest lender State Bank of India (SBI) had cut interest rates on home loans to 8 per cent and on car loans to 10 per cent for a period of one year

The new rates are applicable to all customers availing loans between February 23 and May 31, 2009, a bank official quoted in a statement.

Apart from PNB, Union Bank of India has also decided to cut the interest rates on new car loans by 125-150 basis points and on home loans by 25-200 basis points.

Union Bank's revised interest rates on new cars will be 11 per cent (earlier 12.25 per cent) for loans up to three years. However, for loans over three years to five years the revised rate is 11.25 per cent (12.75 per cent).